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EUR/GBP looking sharp!

By:
Tomasz Wiśniewski
Published: Dec 7, 2016, 12:00 UTC

Italian referendum brought us expected volatility but not many people predicted the direction right. Nevertheless, Euro gains created decent trading

EUR/GBP looking sharp!

Italian referendum brought us expected volatility but not many people predicted the direction right. Nevertheless, Euro gains created decent trading occasions across the Forex market. One of the best opportunities that we can spot on the FX is EURGBP. The longterm sentiment here is bullish. On a daily chart, price is still making higher highs and higher lows. Monday’s reversal happened on a very important place and is technically relevant. As we can see, the price bounced exactly on the horizontal support around 0.8320, which was active from June till September 2016. What is more, this is where 38.2% Fibonacci is, which only makes this signal stronger. In addition to this, retracement is a ‘V’ shaped bounce, which is very characteristic for a strong movements.

EUR/GBP Daily Chart
EUR/GBP Daily Chart

Situation in the short-term is also bullish. What do we have here (on the H1 chart), is an inverted head and shoulder formation (blue neck line), which is already active as the neck line was broken today. One thing missing here for a full bullish spectrum is a breakout of the red mid-term downtrend line. Once this will happen, the odds for an upswing will be much bigger. The closest support is 0.83 and entering here gives you very promising risk to reward ratio, so the factor that every trader should be looking for.

EUR/GBP 1H Chart
EUR/GBP 1H Chart

When placing orders on Euro, remember that on Thursday we do have an interest rate decision and a press conference from the ECB, which always brings the volatility here. That is the time when technical analysis steps a side, that is why you should be extra careful and protect yourself with stop.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

About the Author

During his career, Tomasz has held over 400 webinars, live seminars and lectures across Poland. He is also an academic lecturer at Kozminski University. In his previous work, Tomasz initiated live trading programs, where he traded on real accounts, showing his transactions, providing signals and special webinars for his clients.

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